Labor, Infrastructure and Supply Chains

Ag Groups Highlight Disruption Concerns in Supply Chains

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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A docked container ship, which is what a lot of ship captains off ports in California would like to see right now. As the number of ships waiting off port hits record numbers, ag groups are highlighting supply chain issues with the Department of Transportation. (DTN file photo)

OMAHA (DTN) -- More than 50 agriculture groups wrote to Transportation Secretary Pete Buttigieg to highlight disruptive factors facing the U.S. agricultural and food supply chain, ranging from labor and infrastructure needs to calling on USDA not to idle farm ground.

The Department of Transportation had requested information to prepare a report for President Joe Biden on ways to address the country's current supply chain challenges.

The letter comes with increasing concerns about the U.S. supply chain and inflation. The American Farm Bureau Federation released some perspective on how COVID-19 has created "pandemic inflation" that is "reshaping the details of supply and demand, the selected shortages coming out of those changes, and those shortages having cascading impacts through the many supply chains that make up our productive economy."

Farm Bureau's analysis concluded, "It will take time and investment (and labor, a story for another day) to build out the capacity to fine tune our supply chains again. In the meantime, we may have to wait for that new truck and pay more for when it gets here." https://www.fb.org/…

The letter from the coalition of agricultural organizations, called the Agricultural Transportation Working Group, includes a long list of major farm organizations, as well as agricultural retailers and truckers. The coalition's letter highlighted the need for labor, transportation and infrastructure policies, proposals on container ships, rail service and upgrading inland waterways.

The letter to Buttigieg noted labor is the most pressing concern right now. "The lack of access to labor threatens operations and supply chain resiliency and leads to lost productivity and higher prices for food and agricultural products along the supply chain," the Ag Transportation Working Group (ATWG) wrote.

Within DOT's jurisdiction, the agricultural groups wrote that changing policies to increase trucking productivity would help. That includes lowering the age eligibility for interstate drivers to 18 to 20 years of age, as at least some states have done.

Among the recommendations cited by the National Corn Growers Association: -- Rehabilitation of aging waterway infrastructure on the Upper Mississippi River and Illinois River, including the addition of seven 1,200-foot locks on the Upper Mississippi River and Illinois Waterway as part of the Navigation Ecosystem Sustainability Program.

-- Encouraging the Surface Transportation Board to consider a regulation that would allow for the use of "reciprocal" or "competitive switching" on railroads to enable shippers and receivers geographically beholden to one rail carrier to gain access to a second rail carrier through a short distance "switch."

-- Continue coordination between USDA and Department of Transportation departments to ensure agricultural haulers and the rest of the trucking industry have the flexibilities needed to provide timely delivery of essential products. Flexibilities such as relief from Hours-of-Service requirements have been critical over the last 18 months.

"To be successful, farmers must have a reliable and fully functioning national transportation system that will allow us to receive our fall fertilizer shipments and deliver our products to consumers in a timely fashion," said Chris Edgington, an Iowa farmer and NCGA's president. "That's why NCGA, along with other groups, are making our voices heard in these discussions."

NCGA also said President Biden's announcement that the Port of Los Angeles would begin to operate 24 hours, seven days a week "could potentially mitigate the bottleneck of goods on the West Coast awaiting distribution throughout the country."

The Wall Street Journal reported Friday that the backup of container ships off Los Angeles and Long Beach, California, reached 79 vessels on Thursday, the most recorded, topping 73 vessels held off the ports on Sept. 19.

There are a total of 169 cargo ships, bulk containers, tankers and cruise ships waiting in some form to dock at the two port complexes, the WSJ reported, according to information from the Marine Exchange of Southern California, which tracks ship movements.

Some of the recommendations by the agricultural groups tie into infrastructure needs. The U.S. Senate passed a $550 billion infrastructure bill in August, but the bill has stalled as part of the broader spending negotiations in Congress. The bill includes $17.3 billion for ports and inland waterways. The bill includes $110 billion for roads and bridges and as much as $66 billion for rail as well.

Going beyond moving products, the agricultural groups in the letter to the transportation secretary also called on USDA to collaborate with other federal agencies on issues around both climate change and supply chain policies, "due to their inherent linage to the production of raw agricultural commodities."

Specifically, the agricultural groups do not want USDA to idle crop land as part of its climate policies. Instead, the groups want USDA to provide more financial incentives in programs for conservation on working lands. The letter stated "the ATWG urges USDA to prioritize federal resources towards working land programs to achieve large environmental and economic benefits by incentivizing broader adoption of best management farming practices and ranching practices."

Talking to reporters earlier this week, Agriculture Secretary Tom Vilsack also highlighted some of the supply chain challenges at ports. The Biden administration has moved to expand hours at the Port of Los Angeles to try to move more containers. A bigger challenge, the secretary said, was the need for truck drivers. Vilsack said the administration is looking for ways to accelerate approval for commercial drivers' licenses (CDLs) to people interested in being truck drivers.

The agriculture secretary expressed confidence over time that the supply chain situation will even out. He noted initially there were problems during the pandemic over the lack of supply for certain products and the lack of need for others.

"This is essentially going to even out, if you will. We saw tremendous disruption of the supply chain with the pandemic," he said. "This is sort of the flip side of it. During the pandemic, we had lots of supply, then demand changed because restaurants shut down and we had a hard time transitioning to food assistance." He added, "Now, we've got tremendous demand as we've reopened the economy and people are going to back to work and things are opening up."

DTN Political Correspondent Jerry Hagstrom contributed to this report.

Chris Clayton can be reached at Chris.Clayton@dtn.com

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Chris Clayton